If you are into eCommerce and you have been investing time and resources to attract new customers and retain the old ones on your online store, you must have reached a conclusion that segmentation of your customers is one of the best possible ways out there to increase your sales.
Especially if you are a small store owner.
And in every possible way you can think of.
Segmenting your email list, for example, will help you create successful and effective email marketing campaigns, and segmenting other vital processes (such as social media efforts for example) can help you achieve unique feeling among your buyers – that you have tailored unique shopping experience exclusively for them.
And statistics are clear on this one – 83 percent of the buyers want completely personalised shopping experience.
After all, we all have our more or less secret places around the city that we love going back to, only because owners or staff were thoughtful, caring and attentive.
Customer service can definitely make or brake your business.
And the fact that business owner wanted to know more about your habits in order to give you the best service possible, is what will always make you come back.
And show appreciation in return.
Creating a bond that could hardly be broken is probably the Holy Grale of every business.
But, in order to ask “How’s everything at work?” and “Did that dreadful client finally said he’s satisfied?” – you need to know that there is a job.
And that there is a client from hell that made your guest order triple espresso the other day and come by more often than usual.
But how do you find out?
Same thing happens in eCommerce. You need to find out, you need information.
The difference is, and we dare to say it – it is even easier to obtain relevant data online.
After all, to complete one simple purchase you have to ask your buyers to leave their name, last name, shipping and billing address, email address and list of products that they need.
In order to kick off your small business story successfully, you had to define and evaluate potential customer groups that will be the target for all of your future marketing efforts.
No matter what size your business is, it will probably face losses and undergo difficulties unless you properly segment your market.
You need to know at every moment towards which group you wish to focus your marketing activities, social media engagement, and in which direction will your promotional activities roll out in future.
Let’s say that you are selling hand bands. You are into sports and tired of poorly designed bandages that go loose and get thinner and thinner after every use, until they become a poor excuse for a band.
Until they completely loose their function and your blisters and peeled skin become the source of anxiety and distraction while working out.
Without properly segmenting your market, this specific product will end up nowhere.
Those not interested in sports will probably see it and ignore it.
Those in need will stick to their old ways and buy in a place where they are sure what they are getting, since they already experienced it.
But what if your product is so top notch, that once they try it, they forget competition exists.
And forget the pain.
It is clear that you will target man (and certain percentage of woman) aged 16-50, that are into weight lifting, cross-fit or similar sports, that are engaged in some sort of physical activity at least two times per week in their local gym.
Then, why wasting time and other equally important resources trying to let everyone know that you have a great product on your online store.
Everyone doesn’t care.
Your first step towards understanding where to begin with your market segmentation thing is to make sure you define your buyer persona.
Defining your buyer persona
In order to create customer groups, you need to understand who will comprise those groups.
Define them carefully, and have in mind two crucial things:
- It might happen that you need to use several different methods in order to define your buyer persona.
- It might happen that you define not only one, but several buyer personas on your online store.
Of course, you can have as many different buyer personas as you identified, but each customer group should not contain different personas as they will not give desired results.
Here are some of the basic questions you will need answers to:
Geographic – where are your buyers coming from?
Demographic – how old are they?
Psychographic – why they need your product? What needs to be done so they could become recurring customers? What are their needs? What is their lifestyle? Habits?
B2B or B2C – are you targeting businesses or you wish for your business to be customer oriented?
And much more, depending on what your product and target market is.
How to perform customer segmentation in Magento?
Magento allows you (and we encourage you) to create customer groups on your online store.
It can be beneficial for many reasons.
It is well known that shipping expenses, for example, are something that online shoppers are not really fond off, and that it can greatly discourage them when faced with it while browsing your online store.
Of course, you should always have in mind that each and every time you are trying to segment your customers, you have to bring data driven decisions.
Guessing will leave you without your customers and without sales.
Great thing about Magento is that it offers you to easily group your customers that share same preferences and same behaviour on your online store, segment them and create special offers, discounts and promotions.
In a nutshell – ensure that their trust is reciprocated and motivate them to return to your online store by making an offer they cannot resist.
- Like Facebook page and obtain coupon containing discount code.
- Subscribe to email list and get a free shipping on certain items or purchase as a whole.
- Get a discount for certain products on an online store.
- Receive a birthday gift card.
And list can go on and on…
To begin, log in to your administrator panel.
At this point, you have an option to add completely new customer group. You might want to add, for example, Newsletter Subscribers group and add existing customers to it so that you could send them some sort of special offer.
After you have added new customer group, your admin panel in Magento will look somewhat like this:
Now, simply assign this customer groups to your customer. It’s easily manageable from admin panel.
We say “somewhat” because screenshot above shows what our table looks like after we added new customer groups.
This is important to notice for one reason only – Magento by default comes with NOT LOGGED IN customer group which is a group for those browsing and shopping on your online store as guests.
This group cannot be edited and obviously – it is impossible to assign customers to this group as they have not created an account on your online store.
That is just one of many reasons why you should strive to motivate your customers to create an account on your store.
Otherwise, they will miss out great promotions and you will fail to create a longterm bond with your buyers.
Adding new customer group in Magento is more than easy – you simply need to decide on tax class and group name.
But, we want to show you how to use customer segmentation that you previously envisioned and make it a reality by simply applying rules to your customer groups.
This is a great moment to emphasize this great functionality Magento offer out of the box.
Magento offer combining different rules – meaning – your customers can obtain multiple discounts.
By setting up your catalog price rule.
Navigate to Promotion and choose Catalog price rule.
Start setting up your rule by adding Name, Description, marking status as Active, marking Website, and choosing Customer Groups that will be eligible for obtaining benefits from your rule.
Fulfilling all those conditions would mean that one customer can get all those benefits on your online store.
The only thing you need to do is mark customer groups that can be part of your rule and determine rule priority.
Now, move on to next tab in your left hand menu and set up your conditions.
Let’s say that ladies can obtain discount if they subscribe and purchase one of your brand new products. And additional discount if they are from United Kingdom.
You can go overboard and offer shipping if total amount of their shopping cart surpasses certain sum.
Magento allows you to add as many rules you wish, and in case your customer has all the rules fulfilled, he will obtain multiple discounts.
Move on to Actions tab. Define what kind of discount will your customer obtain, whether the discount will be available for subproducts.
Of course, you can also prevent every rule you came up with, and allow customer to obtain only one by simply changing tab Stop Further Rule Processing and choosing Yes instead of No.
Note that one of the most important parts of the entire process is marking properly which customer group will be able to use which rule.
Also, once you discovered your ideal buyer, created catalog price rule and customer group, it is time to think what kind of content you could create and ensure additional reason for them to follow you and become loyal to your online store.
Remember, your blog can increase chances of customers finding you and discovering your online store.
So go ahead and start writing about diets, supplements, healthy eating habits, running and sports in general.
Share tips, products and recommendations and you cannot go wrong.
In order to conduct your marketing activities in a productive and efficient way and obtain the best possible results on your online store, you need to perform several surveys, in-depth research of who your ideal customer is, and tailor everything on your store according to it.
Choosing a niche product will largely determine who your ideal customer is.
Use knowledge you have of your product to create your customer – HubSpot even suggests you give him a name so that you could complete image in your head of your buyer persona.
This way, you will be certain that your customers will choose you and that they will be completely satisfied with your product and experience on your store as a whole.